News Release


May 2, 2018

A. H. Belo Corporation Announces First Quarter 2018 Financial Results

  · Digital subscriptions grew by 8,036 subscribers, or 44.2 percent, in 2018 compared to 2017
  · Operating expense decreased $10.2 million, or 15.5 percent, in 2018 compared to 2017


DALLAS - A. H. Belo Corporation (NYSE: AHC) today reported first quarter 2018 net loss of $(4.0) million, or $(0.19) per share. In the first quarter of 2017, A. H. Belo Corporation (the “Company”) reported net loss of $(4.4) million, or $(0.21) per share.


In the first quarter of 2018, on a non-GAAP basis, the Company reported operating loss adjusted for certain items (“adjusted operating loss”) of $(2.5) million, a decrease of $1.7 million, or 198.7 percent, when compared to adjusted operating loss of $(0.8) million reported for the first quarter of 2017.


Jim Moroney, chairman, president and Chief Executive Officer, said, “During the first quarter, we grew our paid digital subscriber base by 8,036 subscribers, or 44.2 percent, over the first quarter 2017, ending the first quarter 2018 with 26,206 paid digital subscribers. It is imperative that we continue to build our base of consumer revenue and our results in the first quarter show real progress. Also, we continued to decrease our dependence on print advertising revenue. For the first quarter, total digital and marketing services revenue, excluding the impact of the new revenue guidance, was 41.1 percent of total advertising and marketing services revenue, reflecting a 430 basis point increase when compared to the 36.8 percent reported in the first quarter of 2017. Total digital and marketing services revenue was 22.4 percent of total revenue, reflecting a 110 basis point increase when compared to the 21.3 percent reported in the first quarter of 2017. Fortunately, we had implemented strong cost reduction actions in 2017, which contributed to total adjusted operating expense being 10.8 percent lower than the first quarter in the prior year.” 


First Quarter Results  


Total revenue was $49.5 million in the first quarter of 2018, a decrease of $11.4 million, or 18.8 percent, when compared to the first quarter of 2017.


Revenue from advertising and marketing services, including print and digital revenues, was $25.7 million in the first quarter of 2018, a decrease of $9.5 million, or 26.9 percent, when compared to the first quarter of 2017. The Company adopted the new revenue guidance (Topic 606) as of January 1, 2018, which requires revenue to be recorded net for certain transactions where the Company acted as an agent. Prior to adoption, such revenue was generally recorded gross. As a result of adopting this new guidance, advertising and marketing services revenue was reduced by $2.9 million for the three months ended March 31, 2018, with the offsetting change recorded as a reduction to operating expense.


Excluding the impact of the new revenue guidance, advertising and marketing services revenue decreased $6.6 million, or 18.8 percent, when compared to the prior year period. For the first quarter of 2018, total digital and marketing services revenue was 41.1 percent of total advertising and marketing services revenue, reflecting a 430 basis point increase when compared to the 36.8 percent reported in the first quarter of 2017. Total digital and marketing services revenue was 22.4 percent of total revenue, reflecting a 110 basis point increase when compared to the 21.3 percent reported in the first quarter of 2017.


Circulation revenue was $17.7 million, a decrease of $1.4 million, or 7.4 percent, when compared to the first quarter of 2017. The decline was primarily due to a decrease in home delivery and single copy volume. In addition, circulation revenue was reduced by $0.3 million for the three months ended March 31, 2018, as a result of adopting the new revenue guidance, which requires revenue to be reduced by any non-payment for the grace period in which newspapers are delivered after a subscription expires. Prior to adoption, non-payment was recorded as bad debt to operating expense.


Printing, distribution and other revenue decreased $0.6 million, or 8.7 percent, to $6.0 million, due to a $0.3 million decrease in commercial printing revenue and a decrease of $0.2 million related to a discontinued product line.


Total consolidated operating expense in the first quarter of 2018, on a GAAP basis, was $55.7 million, a decrease of $10.2 million, or 15.5 percent, compared to the first quarter of 2017. Excluding the expense decrease related to the adoption of the new revenue guidance, consolidated operating expense decreased $7.1 million, or 10.8 percent, when compared to the prior year period. The decline was primarily due to decreases of $4.1 million in employee compensation and benefits expense, $1.4 million in distribution expense, $0.6 million in newsprint expense, $0.4 million in consulting expense and $0.4 million in temporary services expense.


In the first quarter of 2018, on a non-GAAP basis, total consolidated operating expense adjusted for certain items (“adjusted operating expense”) was $55.1 million, a decrease of $6.7 million, or 10.8 percent, compared to $61.7 million of adjusted operating expense reported in the first quarter of 2017. The decline is primarily due to decreases in employee compensation and benefits, distribution, newsprint, consulting and temporary services expense.


The Company’s newsprint expense in the first quarter of 2018 was $2.9 million, a decrease of 6.6 percent, compared to the first quarter of 2017, due to lower circulation volumes. Newsprint consumption declined 14.3 percent to 4,999 metric tons. Compared to the first quarter of 2017, newsprint cost per metric ton increased 8.0 percent and the average purchase price per metric ton for newsprint increased 9.8 percent. 


Non-GAAP Financial Measures  


Reconciliations of operating loss to adjusted operating loss, total net operating revenue to adjusted operating revenue and total operating costs and expense to adjusted operating expense are included in the exhibits to this release.


Financial Results Conference Call 


A. H. Belo Corporation will conduct a conference call on Wednesday, May 2, 2018, at 9:00 a.m. CDT to discuss financial results. The conference call will be available via webcast by accessing the Company’s website at www.ahbelo.com/invest. An archive of the webcast will be available at www.ahbelo.com in the Investor Relations section.


To access the listen-only conference call, dial 1-866-233-3843 (USA) or 651-224-7472 (International). A replay line will be available at 1-800-475-6701 (USA) or 320-365-3844 (International) from 11:00 a.m. CDT on May 2, 2018 until 11:59 p.m. CDT on May 9, 2018. The access code for the replay is 447524. 


About A. H. Belo Corporation 


A. H. Belo Corporation is a leading local news and information publishing company with commercial printing, distribution and direct mail capabilities, as well as expertise in emerging media and digital marketing. With a continued focus on extending the Company’s media platform, A. H. Belo Corporation delivers news and information in innovative ways to a broad spectrum of audiences with diverse interests and lifestyles. For additional information, visit www.ahbelo.com or email invest@ahbelo.com.


Statements in this communication concerning A. H. Belo Corporation’s business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends, capital expenditures, investments, dispositions, impairments, business initiatives, acquisitions, pension plan contributions and obligations, real estate sales, working capital, future financings and other financial and non-financial items that are not historical facts, are “forward-looking statements” as the term is defined under applicable federal securities laws. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those statements. Such risks, trends and uncertainties are, in most instances, beyond the Company’s control, and include changes in advertising demand and other economic conditions; consumers’ tastes; newsprint prices; program costs; labor relations; technology obsolescence; as well as other risks described in the Company’s Annual Report on Form 10-K and in the Company’s other public disclosures and filings with the Securities and Exchange Commission. Forward-looking statements, which are as of the date of this filing, are not updated to reflect events or circumstances after the date of the statement. 


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